South Africa's Zuma won't suspend prosecutor over Gordhan charges

JOHANNESBURG (Reuters) - South Africa's President Jacob Zuma will not suspend the head of the prosecution service for laying and then withdrawing corruption charges against Finance Minister Pravin Gordhan, the presidency said on Friday.

State prosecutor Shaun Abrahams in October dropped fraud charges against Gordhan related to his time as head of the revenue service just weeks after they had been filed, drawing criticism from opponents who said it was part of a politically-motivated "witch-hunt".

The charges had heightened concerns among investors about a power struggle between Gordhan and Zuma and even drew criticism from senior members of the ruling African National Congress. Zuma and Gordhan deny there is any rift.

"It is the President's well considered view that there is no prima facie evidence pointing to the conduct of three prosecutors, constituting misconduct or lack of fitness," the presidency said in a statement.

"The President could not find substantiation for the claim that (the prosecutors) conducts were actuated by ulterior motive or any other improper motive."

Gordhan was to face charges that he fraudulently approved early retirement for a deputy tax commissioner Ivan Pillay and re-hired him as a consultant, costing the revenue service 1.1 million rand ($80,000).

Zuma's team and the Treasury under Gordhan have disagreed about government spending, including at loss-making state companies like South African Airways, analysts say.

Investors and rating agencies back Gordhan's plans to rein in government spending in an economy that is barely growing.